Aeroflex Industries Ltd

- Asad Daud stated that currently, Aeroflex Industries Limited does not plan to raise any debt. - Future requirement of short-term debt will be decided at the relevant time, but no immediate plans exist. - The company recently completed a preferential allotment; funds from this equity raise are expected soon following in-principle approval from stock exchanges. - Overall capital expenditure for expansion is planned around INR97 crores, funded by internal accruals and recently raised equity. - No specific plans to raise additional equity beyond the preferential allotment were mentioned. - Debt levels remain zero as of the latest update, and management aims to keep peak debt minimal or nil.

- Capex for liquid cooling skid assemblies is ongoing, based on demand forecasts from partners, targeting peak utilization and revenue of INR350 crores by FY'29. - Capital expenditure for Miniature Metal Bellows project has been rationalized from INR23 crores to INR10.5 crores, reducing capacity from 240,000 to 50,000 pieces annually to match near-term demand and lower risk. - Ongoing investments in process automation include robotic/automated welding stations and an annealing plant, targeted for completion by end of the calendar year to improve throughput and consistency. - Hyd-Air subsidiary plans capex to increase capacity by adding new CNC machines, supporting growth towards an optimum INR45-50 crores annual revenue. - Total capex during current financial year ~INR36 crores; overall planned capex including working capital around INR97 crores. - No current plans to raise debt for capex; funding primarily through preferential allotment and internal accruals.

- Expectation to increase metal bellows run rate from INR12 crores to INR36 crores in next few quarters, targeting peak utilization (~INR85 crores revenue) by FY'28/FY'29. - Anticipated growth in liquid cooling skid assemblies with capacity expansion from 2,000 to 15,000 units, projecting INR300-350 crores peak revenue around FY'29. - International market growth boosted by expected EU FTA implementation, with exports having grown 30% in last quarter and strong demand from EU and U.S. existing customers. - Domestic market showing robust growth, notably in steel, ports & terminals, and railways sectors, contributing to overall increased sales. - Margins to improve with cost optimization despite tariff challenges, aiming for EBITDA margin up to 25% over next couple of years. - Pipeline for liquid cooling solutions includes INR45 crores of confirmed orders scheduled for dispatch, indicating visibility over next 1-2 years.

- Aeroflex aims to increase EBITDA margins to about 25% over the next couple of years, up from the current ~23.5%. - Despite tariff-related challenges and an 8% price hit, margins are expected to be maintained around 22-23% through cost optimizations and vendor support. - The metal bellows segment is projected to grow from INR12 crores annual run rate to INR36 crores in a few quarters, with peak utilization and revenue (~INR85-100 crores) expected by FY '28-29. - Liquid cooling skid assemblies are expected to reach peak utilization and revenue (~INR350 crores) by FY '29, with margins better than hoses and comparable to assemblies. - Domestic market growth remains strong, especially in steel, ports, terminals, and railways industries, supporting overall earnings growth. - Export markets, particularly EU with upcoming FTA benefits and stable U.S. existing customer orders, are expected to boost revenue and profitability going forward.

- Asad Daud mentioned having a healthy order book supporting a positive outlook for the remaining quarter of the financial year. - For the liquid cooling skid assemblies, there is a pipeline/order book of about INR45 crores planned for dispatch as per partner schedule. - The company continues to receive repeat orders from existing U.S. customers but faces delays in onboarding new ones due to tariffs. - Demand visibility for miniature metal bellows has led to rationalizing capacity to meet near-term demand with scope for phased scaling. - Increased traction is seen in the domestic market, especially from steel, ports & terminals, and railways sectors, supporting order inflows. - While exports growth faces challenges from tariffs, EU market orders are expected to rise in coming quarters.